Zvinakis Mining Company paid $260,000 for the rights to mine lead in southeast Missouri. The cost to drill and erect a mine shaft was $2,460,000, and equipment to process the lead ore before shipment to the smelter was $1,926,000. The mine is expected to yield 2,000,000 tons of ore during the five years it is expected to be operating. The equipment has an estimated residual value of $156,000 when mining is concluded. The mine started operations on April 30, 2016. In 2016, 360,000 tons of ore were extracted, and in 2017, 760,000 tons were mined.

Required:

1.

Compute the depletion rate and the units-of-production depreciation rate. (Round your final answers to 3 decimal places.)

2.	Compute depletion and depreciation for 2016 and 2017. Q54